By Mark Putrino via Iris.xyz
Many investors like to invest in companies that pay high dividends.
And that makes sense because there are many advantages including a steady stream of income and the ability to have the dividends reinvested into the stocks.
According to NASDAQ.com, these seven companies are currently paying the highest dividends of all the stocks that trade on the NASDAQ.. At first glance they all seem extremely high to me, and we all know that there is no such thing as a free lunch on Wall Street, so I decided to take a look at each one to see if I could figure out what is going on.
At the top of the list is the Credit Suisse AG Credit Suisse X-Links Crude Oil Shares Covered Call ETN (USOI). The ETN provides the return of USCF’s front-month oil ETF, USO, coupled with a notional short position in USO calls expiring the next month with strike prices 6% out of the money. The strategy adds yield and lowers volatility compared to owning USO outright, but at the cost of upside participation.
NASDAQ.com says that it has an annualized dividend of $6.38 with a current yield of 29.4%. Wow! That is pretty high.
But something here doesn’t make sense. You can see on the chart below that the yield is actually 13.35%. This is the same number that Yahoo Finance has. CNBC says the dividend is 16.5%.
So, what is going on here?
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